The Pride of East Africa – Aired August 2012
Tanzania. The largest country in East Africa is one that offers tremendous opportunities for investors. Having been spared the internal strife that has harmed many African states, Tanzania’s outlook is promising. This is an emerging economy with high growth potential.
Almost four times the size of the UK, Tanzania covers 943,000 square kilometers. The capital city is Dodoma, while its largest city is Dar es Salaam.
Tanzania offers tremendous opportunities for investors as it is endowed with an abundance of natural resources such as arable land, political stability, good market policies and an excellent geographical location in the East African region.
Whilst the economy is relatively diversified, a number of opportunities remain untapped in many sectors. In an attempt to make Tanzania the preferred destination for foreign direct investment, continuous improvements towards the creation of an open environment have been made, including privatization, investment incentives, liberalized foreign exchange controls and the ongoing establishment of a socially responsible economy. It is also one of the most peaceful countries in the region.
Tanzania experienced a steady rise in foreign direct investment over the last decade. In 2009, FDI was valued at 650 million dollars. Also in the last decade the total FDI stock in Tanzania exceeded 6 billion dollars, making the country an East African leader in FDI. Tanzania’s strategic location makes it a natural hub for investors seeking to exploit not only its resources but also a growing market of 527 million consumers in East and Southern Africa.
The Tanzanian economy has been quick to recover from economic challenges and is expected to remain buoyant with a GDP growth forecast that is well above the regional averages.
Tanzania offers a well-balanced and competitive package of fiscal incentives in comparison with other African countries. Aiming at providing competitive fiscal regime on foreign trade, Tanzania has signed double taxation treaties with various nations.
Many international companies are very hesitant to invest in Africa due to the continent’s image of volatility and instability.
Tanzania’s economy depends heavily on agriculture, which accounts for the majority of the country’s GDP, exports, and employment. The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania’s archaic economic infrastructure, including rail and port infrastructure that are important trade links for inland countries. Recent banking reforms have helped increase private-sector growth and investment. Continued donor assistance and solid macroeconomic policies supported a positive growth rate, despite the world recession.
Tanzania is part of the Common Market for Eastern and Southern Africa Union, or COMESA. With its 19 member states, a population of over 389 million people and an annual export bill of US$82 billion, COMESA forms a major market place for both internal and external trading.
Tanzania has been carrying out successful economic and structural reforms, which have improved economic performance and sustained growth. In addition, Tanzania has a stable fiscal regime with sustainable level of inflation. Under its economic recovery program, Tanzania increased revenue streams and substantially reduced spending. Continuous decline in the rate of inflation is mainly the result of prudent fiscal and monetary policies.
Land ownership remains restrictive in Tanzania. Under the Land Act of 1999, all land in Tanzania belongs to the state. The National Land Use Planning Commission, or NLUPC, was established so as to harmonize and coordinate all land-use related policies and legislation.
The optimism in the country is contagious, and more than ever, Tanzanians are excited about the positive changes sweeping the economy and society.
The Tanzanian banking sector embarked on a plan for financial liberalization in 1992 in order to sustain economic growth. This has been accomplished through the mobilization of financial resources, increasing competition in the financial market, and the enhancement of the quality and efficiency of credit allocation. As a result of liberalization, the banking sector in Tanzania is booming.
Despite the ongoing global financial crisis, the banking sector continues to be safe, stable and sound.
Information and Communications Technology, or ICT, continues to play a major role in contributing to the social and economic development of the country. Today, the ICT sector in Tanzania is completely liberalized and competition has grown in mobile cellular services, radio paging, internet services and data communications services.
Due to the convergence of technology and services, the Tanzania Communication Commission and the Tanzania Broadcasting Commission were merged in 2003, to form the Tanzania Communications Regulatory Authority, or the TCRA.
The Tanzania Telecommunications Company, or TTCL, currently provides voice and data communication services, to over 300,000 business and residential customers in the country, as well as network services to other licensed telecom operators.
The potential for investment in this sector is immense.
Weak healthcare infrastructure is a common concern in Africa, and Tanzania is no exception. The main roadblock to health policy is poor quality and inequitable access to health services. In addition, more skilled health providers across the system are also needed to fill job vacancies in the health care sector which account to as much as 65 percent.
A country like Tanzania needs further donor funding to improve the quality of its healthcare system, increase the efficiency of existing structures, and monitor health spending. International donors could assist the Tanzanian government in seeking long-term, sustainable financing mechanisms in the healthcare sector.
Lying just south of the equator and bounded by the vast Indian Ocean, Tanzania is fascinating and alluring. No other country in Africa resonates with the wild and exotic yet remains reasonably accessible. The word “safari” means “journey” in Swahili, and what a journey this is.
Tanzania offers travelers an array of options, all set against the backdrop of some of the most diverse cultures in Africa. Within the space of several hours, it’s possible to go from relaxing on a pristine beach to visiting Maasai villages and coming face to face with some of the planet’s most dangerous predators. With its many attractions for any budget, Tanzania has managed to provide a booming and sustainable tourism industry that makes it an ideal destination for both first-time visitors and experienced travelers to the African continent.
The effect of tourism on the environment and the landscape, as well as massive industrialization and illegal poaching, can be devastating if not properly regulated. The government of Tanzania are currently implementing reforms that will improve the management of the nation’s natural wealth and resources.
The Tanzania tourism industry is open for foreign direct investment, and the government is keen on bringing these new entrants into the market.